While Amazon might be reaping the benefits of e-paper through sales of the Kindle, Samsung looks like it might be struggling with the paper-like displays.

An announcement on the Yonhap News Agency signals the Korean company’s exit from the e-paper business. The reason? Cost issues.

While Samsung may have decided e-paper is just too expensive to manufacture, it will continue to offer e-reader devices. Instead of using e-paper though, they will rely on an LCD display just like the iPad does. We’ll see a new device in this category from Samsung next year.

I am wondering whether Samsung sees a cost issue because e-paper is expensive to manufacture, or because it doesn’t make sense to use it when LCD is so readily available and works well enough for reading?

Samsung is well-established as a display and memory manufacturer, and it has the production facilities in place to produce such products as cheaply, if not cheaper than anyone else. E-paper is still a relatively new technology though, and therefore the costs of production will be higher. Research and development is also key to improving e-paper as well as experimenting with color solutions. That adds even more cost.

Although Kindle is demonstrating there is a market for e-readers at the moment, their future success depends on advances being made with the display technology. If we don’t see color e-paper soon then the market will be limited and tablets will become the focus for many consumers. Let’s not forget LCD and OLED are also improving all the time too.